Bosnia and Herzegovina has significant development needs, particularly in the environmental sector. It will need external support for environmental, climate and sustainability projects aimed at achieving the goals set out in the Paris Agreement by 2030 and 2050 respectively. Likewise, if Bosnia and Herzegovina wants to become a member of the European Union, it will have to meet environmental standards.
Research literature on (the effects of) international public funding flows in Bosnia and Herzegovina is scarce, highlighting a lack of scientific review and independent assessments of the impacts of international funding, which hinders future learning.
Bloomberg Adria Issues Stockholm Institute analysis (SEI), the first which provides a comprehensive quantitative mapping and analysis of environmental financing (financing of climate change, waste management and environmental protection) of Bosnia and Herzegovina in the post-EU period. Paris Agreement, including an analysis of key development strategies. partner institutions (DPI) for Bosnia and Herzegovina.
“The EU Green Agenda will provide 9 billion euros in direct subsidies and potentially mobilize 20 billion euros in private investment over the period 2024-2030,” announced an EU press release. “There are currently no details available on the amount of funding that will be received by each Western Balkan country. The EU’s main priority is to undertake a comprehensive transition to the circular economy in the Western Balkan countries.”
Bloomberg Adria wrote earlier that Bosnia and Herzegovina was lagging behind developed countries in the transition process. That hasn’t changed. Our country faces serious pollution, while the use and recycling of waste is at a very low level.
The transition to a circular economy will have multiple positive effects on solving waste problems. This will help the country benefit from waste recycling, but also promote innovation in manufacturing processes, implementation of new technologies, reduce costs of raw materials in final products and create new jobs.
The analysis showed that the water policy area received just over 50% of all funding. Air quality, climate change and energy; waste; and environmental management policy areas received almost all remaining funds. The policy areas of biodiversity, chemical safety, ambient noise and resource management have received a tiny share of funding, which the publication’s authors find devastating.
“Bosnia and Herzegovina could benefit from diversification of environmental financing, both from the perspective of funders and beneficiaries,” they said.
Graphic: Energy, sustainability and society
The authors of the analysis are Amar Čausević, Sanjin Avdić, Bernardas Padegimas and Biljana Macura from SEI. They believe that additional knowledge on this topic would increase accountability and ownership and develop and bring together other sectors such as the academic community, civil society and the private sector.
“Improving the energy efficiency of buildings, reducing air pollution, establishing a functional circular economy, decarbonizing the transport sector and strengthening overall environmental management is not an easy task. This is a technically demanding undertaking that requires skilled people and a lot of money,” the authors said, adding that other developing countries face the same problems in the region and around the world.
Bosnia and Herzegovina receives most of its funds in the form of grants, but a significant part is loans. As the chart shows, just over half of the funds received between 2015 and 2020 were standard interest-free grants. The authors believe that the loans are not commendable and that Bosnia and Herzegovina should receive more subsidies for its transition.
Graphic: Energy, sustainability and society
“The analysis therefore implies that Bosnia and Herzegovina can advocate for a more equitable distribution of funding, based on its minor contribution to global greenhouse gas emissions. Additionally, even if funding data is complete, future analyzes of funding flows would benefit from even more complete and uniform reporting,” they said.
Improving the sustainability of the production, use and recycling of different raw materials will be at the center of financing intended to support the development of the circular economy.
The linear economy inevitably leads to the production of waste. Developed economies and circular economies are seeing an increase in recycling and a steady decrease in landfilling. In other words, waste constitutes an important resource in these countries.
In 2021, Bosnia and Herzegovina recorded an increase in exports of non-hazardous waste. Waste management and preparatory work is a costly and complex process. On the other hand, potential income and new jobs justify the transition to a circular economy.
“The Green Agenda provides the country with an innovative platform in which policymakers and private sector investors could better coordinate their actions and increase the amount of private investment,” the analysis says. “Furthermore, the relevant authorities of Bosnia and Herzegovina must intensify their efforts to mobilize domestic environmental financing. »
The analysis further indicates that green bonds could play a role in assisting the investments needed for the transition to sustainability. The European Green Deal, via the Green Agenda, is expected to stimulate various reforms in Bosnia and Herzegovina that can indirectly help the country develop national mechanisms to attract more green capital. The analysis was carried out within the framework ESAP 2030+ for Bosnia and Herzegovina program implemented by SEI and funded by the Swedish Embassy in Bosnia and Herzegovina.
“BiH ESAP 2030+ is a revolutionary document because, for the first time in the history of BiH, there will be a comprehensive and detailed plan defining the cost of each measure and suggesting the source of financing,” the authors conclude. “Therefore, authorities of different jurisdictions and CIOs will have a well-structured plan to pave the way for easier cooperation and more effective mobilization of funds.
The article was originally published by Bloomberg Adria on August 16, 2022.
